MoviePass manager allegedly stole to pay for Coachella party

Khalid Itum, 42, was arrested Tuesday and charged with two counts of wire fraud and two counts of money laundering, the U.S. Department of Justice said in a statement. Itum, a Jordanian citizen living in Los Angeles, pleaded not guilty and was released on $75,000 bail.

Before joining MoviePass, Itum founded Kaleidoscope Productions LLC in 2017 and borrowed money from two people to host the party during April’s music festival in Indio, east of Los Angeles, according to the indictment. In November 2017, he became an executive at MoviePass, which had been acquired by Helios & Matheson Analytics a few months earlier.

To repay money he owed for the Coachella party, Itum filed bogus bills to Helios & Matheson for services allegedly provided by Kaleidoscope and another company he owned, prosecutors said. The company paid the bills even though neither Helios & Matheson nor MoviePass were involved in the Coachella event, prosecutors said. Itum left the company in March 2019.

MoviePass initially gained popularity after launching its subscription plan in August 2017 and reached its membership peak of 3 million within a year. But operating losses sent the company and its parent company into bankruptcy by January 2020.

The charges come just months after two former MoviePass executives, Theodore Farnsworth, 60, and J. Mitchell Lowe, 70, were charged with securities and wire fraud for allegedly defrauding investors. The two have been sued by the US Securities and Exchange Commission over similar allegations.

Itum’s trial date is set for April 18. If convicted on all counts, he faces up to 20 years in federal prison for each count of wire fraud and up to 10 years in federal prison for each count of money laundering.